Grassley is a co-sponsor of the Drug Competition Act, which was passed by unanimous consent. The bill, which would help the Federal Trade Commission and the Justice Department combat anti-competitive agreements between brand-name and generic drug manufacturers, has now been referred to the U.S. House of Representatives for consideration.
"Prescription drugs can be a lifesaver for those who are sick. They can also be a budget breaker when they are needed on a long term basis," Grassley said. "Consumers deserve choices and access to prescription drugs at the lowest price and as quickly as possible. This bill will help make sure consumers aren't shortchanged by secret, anti-competitive contracts."
Grassley sponsored this legislation with Sen. Patrick Leahy of Vermont, who is the Chairman of the Judiciary Committee. Other co-sponsors are: Sens. Maria Cantwell of Washington, Richard Durbin of Illinois, Russ Feingold and Herb Kohl of Wisconsin, and Charles Schumer of New York.
Grassley said he learned about anti-competitive contracts between brand-name and generic drug manufacturers when the Federal Trade Commission took action against several manufacturers. Under the current law known as Hatch-Waxman, the first generic drug manufacturer who wins permission to sell a generic drug before the patent on the brand-name drug expires receives temporary protection from other competition. This gives them a 180-day head start on other generic drug manufacturers.
The Federal Trade Commission discovered that companies were exploiting the law by entering into secret deals where the generic drug company claimed the 180-day grace period but withheld sales so the brand-name manufacturer would continue to control the market, in exchange for payment from the brand-name manufacturer.
"Patent laws give drug companies incentives to research and develop innovative new medicines, while other laws ensure that generic drug companies can get into the market and offer more choices and lower prices. We need to make sure this balance is maintained for consumers," Grassley said.
The bill would require drug companies who enter into 180-day agreements to file disclosure documents with both the Federal Trade Commission and the Department of Justice. The bill also imposes monetary sanctions on companies who don't provide timely notification.
The Senate Judiciary Committee gave approval to the Drug Competition Act in June. The full Senate passed the legislation by unanimous consent on Monday night.